The House and the Senate have departed for Thanksgiving, with the House scheduled to return the week of December 2, 2013. The Senate will be home until the second week of December. At this juncture, Congress is expected to exit for the year by December 13.
Rumors abound in Washington that budget conferees, which include all twenty-two members of the Senate Budget Committee and seven Members of the House, could potentially reach a limited two-year deal regarding discretionary spending and some sequester relief. Among the various scenarios being discussed is one that would result in a sequester reduction of approximately $65 billion over a two-year period, and thereby raise top-line spending to $1.012 trillion in Fiscal Year 2014 and to $1.015 trillion in FY 2015. This increase would be evenly divided between defense and nondefense spending with a narrowly tailored proposal that is not expected to result in entitlement cuts.
Even if lead conferees, Sen. Patty Murray (D-WA) and Rep. Paul Ryan (R-WI) reach an agreement, they will still need to persuade their leadership to advance any agreement and obtain support in their respective chambers. Republicans have publicly demanded that any cuts be offset with reductions in mandatory spending programs and Democrats have been looking for tax increases, either through increased tax rates or the elimination of tax deductions or credits. Absent an agreement and ensuing changes, approximately $20 billion in automatic cuts from current spending levels will be triggered by January 15, 2014. At issue between the House and Senate passed budget resolutions is approximately $91 billion, with the House proposing an overall discretionary cap of $976 billion and the Senate calling for a spending limit of $1.058 trillion.
The Senate this past week also saw the elimination of its 60-vote threshold—also known as the filibuster—to approve judicial and executive branch nominees, requiring now a 51 member vote. The change was motivated by the repeated failure of efforts to confirm Obama administration appointees to the Circuit Court of Appeals for the DC Circuit. It can now be expected that three vacancies on the court will be filled in the near term in a manner which will alter the current partisan balance on the court, generally considered to be the second most important court in the nation. Its prominence is based on the fact that the DC Circuit handles numerous appeals of agency rules. The shift in partisan balance holds implications for industry generally and may result over time in a larger number of agency rules being upheld. The filibuster rule, requiring 60 votes, still applies to legislation and to Supreme Court nominations.
Items of Interest
House Passes Various Energy Related Bills; All Unlikely To Be Enacted Into Law:
- Federal Lands Jobs and Energy Security Act—On November 18, 2013, the House passed 228-192, H.R. 1965, legislation designed to accelerate onshore drilling permit decisions, require at least a quarter of nominated federal acreage to be made available for oil and gas production, provide for additional oil shale leasing, and make new National Petroleum Reserve lands available for drilling.
- Hydraulic Fracturing Regulations—The House also passed H.R. 2728, The Protecting States’ Rights to Promote American Energy Security Act, which would prohibit the Department of Interior from enforcing any federal hydraulic fracturing regulations in states that already have similar fracturing regulations or guidance. In response to several controversial EPA assessments of fracturing risks, Republican leaders also incorporated language from other legislation, which would dictate various procedures for the congressional-mandated hydraulic fracturing study and set a September 30, 2016, statutory deadline for the report.
- The Natural Gas Pipeline Permitting Reform Act—On November 21, 2013, the House passed by a 252-165 vote, H.R. 1900, Natural Gas Pipeline Permitting Reform Act, sponsored by Rep. Mike Pompeo (R-KS). This legislation would amend the Natural Gas Act to direct the Federal Energy Regulatory Commission (FERC) to approve or deny a certificate of public convenience and necessity for a pre-filed project within 12 months after receiving a complete application that is ready to be processed. On passage in the House, Rep. Pompeo said “despite all the gridlock in Washington, the House has found a real bipartisan solution to ensure that natural gas energy is more affordable for Americans.”
- House Energy and Commerce Subcommittee on Energy and Power Passes the North American Energy Infrastructure Act. In a 19-10 vote, the Subcommittee cleared the legislation sponsored by Committee Chairman Fred Upton (R-MI) and Rep. Gene Green (D-TX). The bill, which intends to streamline the permitting process for international cross-border pipeline and transmission projects, received unanimous support from the Republicans and from Democratic Reps. Green and John Barrow (D-GA). The Subcommittee did not amend the bill while three Democrat-sponsored amendments were withdrawn or defeated.
- Senator Markey (D-MA) Introduces Legislation to Expedite the Process to Replace the Nation’s Pipeline Infrastructure. The Pipeline Modernization and Consumer Protection Act of 2013 would, according to a press release from the Markey office, “accelerate the repair, rehabilitation, and replacement of natural gas distribution pipelines that are leaking or pose high risks of leaking due to their age, material, or condition.” The Pipeline Revolving Fund and Job Creation Act “would establish a state revolving loan fund for natural gas pipeline repair and replacement to provide additional tools to states and utilities to address old, leaking pipeline infrastructure.”
- FERC Chairman Jon Wellinghoff Announced His Departure. Commissioner Cheryl LaFleur will serve as Acting FERC Chairman going forward. In other FERC-related news, on December 5, 2013 the House Energy and Commerce Committee Subcommittee on Energy and Power is set to hold an oversight hearing with FERC Commissioners. More information on the hearing will be forthcoming.